Bottom Building Picks Up The Pace

The Fed stepped in at a good time with positive comments on rate increases as markets put some distance on recent swing lows. All markets now have a bit of wiggle room to defend and with seasonal 'Santa Rally' ready to kick off then we yet have more good news to come.

The biggest one-day gain was the Nasdaq 100, it gained over 3% on higher volume accumulation. These gains came with a bullish cross in relative performance against the Russell 2000 and 'buy' signals for the MACD and On-Balance-Volume. The first test will be the convergence of 50-day and 200-day MAs around 7,100.

 

The Nasdaq also enjoyed bullish 'buy' signals for the MACD and On-Balance-Volume. It may be a slow grind but a test of 50-day and 200-day MAs is looking ever more likely.

 

Large Caps did not disappoint. The S&P enjoyed a bullish cross of On-Balance-Volume and MACD. There was also a bullish cross in the relative performance against the Russell 2000. The S&P is very close to testing overhead resistance of 50-day and 200-day MAs.

 

Small Caps also gained 2.5% and enjoyed a MACD trigger 'buy'. As a part of this move it does look like the Russell 2000 has returned to a period of underperformance against Nasdaq indices but the groundwork is there for a recovery rally even if the rally was to lag behind that of Tech indices.

 

For tomorrow, look for some consolidation near Wednesday's highs as part of a setup for a new intermediate-term rally. The mini-November swing peaks (which would form the neckline double bottoms) are an initial target - along with 200-day MAs if the latter is lower. Those who availed of the investor 'buy' signal on October 25th should be in the green after today.